For several years the issue of trade and
core labour standards has been the subject of intense debate among and within some World
Trade Organization member governments.

Currently, labour
standards are not subject to WTO rules and disciplines. But some WTO member governments in
Europe and North America believe that the issue must be taken up by the WTO in some form
if public confidence in the WTO and the global trading system is to be strengthened. These
member governments argue that the rights such as: the freedom to bargain collectively,
freedom of association, elimination of discrimination in the workplace and the elimination
workplace abuse (including forced labour and certain types of child labour), are matters
for consideration in the WTO. Several member governments have suggested that the issue be
brought into the WTO through the formation of a working group to study the issue of trade
and core labour standards. Bringing the matter to the WTO, these member governments
believe, will provide incentives for WTO member governments to improve conditions for
workers around the world.

This proposal is among
the most controversial currently before the WTO.

Most developing
countries and many developed nations believe the issue of core labour standards does not
belong in the WTO. These member governments see the issue of trade and labour standards as
a guise for protectionism in developed-country markets. Developing-country officials have
said that efforts to bring labour standards into the WTO represent a smokescreen for
undermining the comparative advantage of lower-wage developing countries.

Many officials in
developing countries argue that better working conditions and improved labour rights arise
through economic growth. They say that if the issue of core labour standards became
enforceable under WTO rules, any sanctions imposed against countries with lower labour
standards would merely perpetuate poverty and delay improvements in workplace standards.

The issue of trade and
labour standards has been with the WTO since its birth. At the Ministerial Conference of
the General Agreement on Tariffs and Trade held in Marrakesh in April 1994 to sign the
treaty that formed the WTO, nearly all ministers expressed a point of view on the issue.
The Chairman of that conference concluded there was no consensus among member governments
at the time, and thus no basis for agreement on the issue.

At the first WTO
Ministerial Conference in Singapore in December 1996 the issue was taken up and addressed
in the Ministerial Declaration. At Singapore, Ministers stated:

We renew our
commitment to the observance of internationally recognized core labour standards. The
International Labour Organization (ILO) is the competent body to set and deal with these
standards, and we affirm our support for its work in promoting them. We believe that
economic growth and development fostered by increased trade and further trade
liberalization contribute to the promotion of these standards. We reject the use of labour
standards for protectionist purposes, and agree that the comparative advantage of
countries, particularly low-wage developing countries, must in no way be put into
question. In this regard, we note that the WTO and ILO Secretariats will continue their
existing collaboration.

Since taking office in
September 1999, WTO Director-General Mike Moore, has met twice with ILO Director-General
Juan Somavia. Mr Moore has said he looks forward to co-operating with Mr Somavia and other
officials from the ILO. He has also been clear that the WTO will be guided by Ministers on
the issue of trade and core labour standards.

Existing collaboration
between the WTO and the ILO includes participation by the WTO in meetings of ILO bodies,
the exchange of documentation and informal cooperation between the ILO and WTO
Secretariats.

Since the Singapore
Ministerial Conference, the ILO has taken two significant steps in addressing the issue of
workers rights. In 1998, ILO member governments adopted the ILO Declaration on
Fundamental Principles and Rights at Work and its Follow-up. Under this declaration, ILO
member governments endorsed some basic principles which are included in the core ILO
Conventions. (These conventions are the fundamental workplace rights including: freedom of
association and recognition of the right to collective bargaining; elimination of all
forms of forced labour; the effective abolition of child labour and the elimination of
discrimination in hiring and employment practices.)

ILO Member Governments
agreed to respect and promote these Core Conventions even if they have not ratified all of
them. As a follow-up, the ILO will issue annual reports in which ILO officials will obtain
information from governments which have not ratified all of the conventions on any changes
that may have taken place in national laws or regulations and which may impact these
fundamental labour rights.

In 1999, ILO member
governments agreed to prohibit and eliminate the worst forms of child labour. Member
governments defined the worst forms of child labour as all forms of slavery, child
prostitution and pornography, the use of children to traffic in drugs and work which is
likely to harm the health, safety or morals of children.

ILO member governments
said they recognized that child labour is largely a function of poverty and that the
long-term solution to elimination of exploitative and harmful child labour is through
sustained economic growth.

A recent World Bank
study estimated that less than 5% of child workers in the developing world are involved in
export related activities.